Can we ever be equal?

English: Differences in national income equali...

English: Differences in national income equality around the world as measured by the national Gini coefficient. The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income, and everyone else has zero income). (Photo credit: Wikipedia)

by Paige Shaw

An unequal society where the upper class holds more of the country’s wealth is considered unfair. In countries such as the United States, the wealthy hold approximately eighty percent of the country’s wealth, and not enough the wealth being taxed from the rich is transferred to the poor. In countries such as Sweden and Denmark, although the distribution of wealth is more equal compared to the U.S., the wealthy still hold a greater percentage of the countries wealth.

Is this still unfair? Objectively, since not all of the classes are equal, it is still unfair. However, I would argue that having a slight inequality between the classes keeps people motivated and is overall better for the economy. People should receive equal opportunities and that everyone should be equal to an extent, but complete equality seems unfeasible.

From a fairly young age we are taught by our parents and in school that everyone is their own individual, and everyone has something about them that makes them unique. Gender, race, and other things aside, you are still different than the person next to you because there is only one of you. So if everyone is different, doesn’t that make it difficult to create a society where everyone is equal?

In his article “Is equality feasible?” Lane Kenworthy mentions that peoples earnings are determined qualities such as intelligence, creativity, confidence, inherited wealth, physical and social skills, and motivation. Most, if not all, are products of genetics, parents’ assets, and traits. We are all inherently different, and we all have our own strengths and weakness, which can make us more capable at performing certain tasks than others. In an equal society where everyone gets paid the same, if one person is a harder worker and better at a certain job than the person beside them, but they are still getting paid the same, it could make them feel less motivated to do their job. Of course there are certain cases that if you loved your job that it wouldn’t matter how much you get paid as long as you could keep doing what you are doing, but the slight inequality between workers keeps people motivated and increases their work effort.

Inequalities are what makes business competitive and drives the economy. And although a completely equal society is an appealing idea, it is not sustainable. In order to pay equally high wages businesses would have to charge their customers more. But in a competitive market, customers will generally refuse to pay more for a good or service when they can get it more cheaply somewhere else. The firm then loses business and has to start letting workers go. Therefore unless wages are lower, which implies some inequality, jobs will not exist.

However it is hard to say whether or not a completely equal society could be good or bad for the economy. It is my general opinion that we need to have that little bit of inequality in order to keep people and markets competitive to drive the economy. It can also be argued that income inequality could decrease consumer demand, and the middle/lower classes may regard high inequality as excessively unfair, causing a decrease in employment motivation and work cooperation.

Complete equality may not be sustainable but too much inequality could also prove to be unsustainable as well. Countries like Sweden and Denmark set a good example of a good balance between equality and inequality. There is still an upper class but more of the countries wealth is transferred to the poor. If more countries adapted a similar system it could prove to be more sustainable.

Reference

Kenworthy, Lane. 2007. “Is Equality Feasible?” Contexts 6(3):28-32.

Social Equality and the Idol of Growth

by Marcel Koníček

I come from the Czech Republic, a country with one of the most equal distributions of wealth in the world. However, even the Czech Republic has recently felt the change in the policies of employment in many parts of the economy that are supposed to raise the competitiveness of the economy on the global markets but which also rob the employees of much of their job security. This change became very tangible after the crash of the US banks in 2008, which started the tsunami of economic crisis that sent all European economies into disarray. Suddenly, the broad group of debt-ridden people whose employment depended on the short-term needs of their employers, beingsuddenly shifted from permanent employment into agency work and short term contracts, living from payday to payday, appeared and it has not disappeared ever since.

This is not a local phenomenon. The changes in the Czech Republic coincide with the systematic worldwide shift that Standing describes in his book The Precariat. In the book he is describing the social group of the same name (which is an allusion to the proletariat), a very broad group of people that are living in constant uncertainty. The growth of this social group is mainly caused by the globalisation of the world economy and the effort of the corporations to cut their costs and keep them competitive with the newly rising economies in Asia (Standing 2011:40-50).

It is possible to assume that being part of the precariat is not something that most people would like to experience. Losing your job security is certainly not a good thing. Still, it is not only the companies that are making this change happen. More and more, it is the policy makers of the countries who contribute to the raising social inequality and job insecurity. They argument with neo-liberal ideas of equality being stifling for the economic growth and job security being a barricade for creating new jobs. They speak about economic growth and statistic measures such as GDP as if it was some kind of pagan idol, a cure-all for all the ailments of the human race. That the only thing that is important in the end is the bottom line.

However, things such as job security and social equality have many merits that are hard to evaluate by simple economic statistics. If somebody does not have to be afraid about the future of his job, he is probably less likely to try abuse the social system. If he lives in a more equal society, it is less likely for him to search for easy-sounding but radical political solutions. In this context, the neo-liberal laissez-faire policies look more like a trade-off that might be or might not be worth it. However, this is only true if their initial assertions are true. Is economic equality really slowing down the economic growth?

According to Lane Kenworthy this might not be so. In his study he is comparing economic equality and growth in many developed countries. He finds that:

“Affluent countries with egalitarian institutions and policies have so far been fairly successful at maintaining relatively high levels of income equality. And that success does not appear to have come at the expense of income growth for the middle class or the poor. There may be a trade-off between earnings equality and job growth, but its magnitude appears to bemodest.” (Kenworthy 2011:32)

If that is so, should the politicians be trying to reverse this shift towards inequality and job insecurity? I believe so. Sadly, it seems that both politicians and businessmen perceive growth and spending cuts as some kind of idol that has to be worshiped despite the consequences. This is in my eyes not a healthy sustainable attitude.

Equality and Fairness: How Can We Get There?

Sexual equality symbol Català: Símbol de la ig...

Sexual equality symbol (Photo credit: Wikipedia)

by Ludvig Bergman

In the endeavour towards income equality, there are many different paths available to reach the final goal, which in this case and in my opinion is an effort-based distribution of the money in the society, where those who work hard and are tasked with relatively difficult work are rewarded with a bigger piece that those who don’t.

To avoid the case of the unequal American society, where the top 1% of the population has almost all the money, and move towards something similar to Swedish society, with the top 20% having a larger amount of money than the other 80% but the distribution between the “steps” are much more even. There is the way of reducing the income for the top paid percentages of the population and raise it for the lower percentages, and just like Sweden maintain high taxes that can be redistributed among the population and used to improve the welfare system. 

The danger with a society like this is the fact that, which is mentioned by Kenworthy in the article “Is Equality Feasible?”, if you are deprived of the financial gain of your efforts and skill development, there will not be any motivation left to contribute to the society by getting a decent education and working hard. People might prefer to go through the mandatory school years just to live off the governmental subsidies, which in Sweden in my opinion are way too high.

A society with people without motivation to achieve anything will quickly detoriate. Isn’t a society where the hardworking highly educated people are providing for the “lazy” through high taxes who are beingdistributed by the government in fact an unfair or even unequal society? People are no longer being rewarded with what they deserve, the hard working are getting less and the “lazy” are getting more, which draws me towards the conclusion of this no longer being the equal society I earlier considered.

For this to be considered equal and per definition fair there can not be any freeloaders allowed. Considering economic equality and fairness of gender, in “Gender equality: why women are still held back,” Abigail Player discusses how women in our contemporary time have never had as many opportunities to lead and change the economical and political landscape. Women earn a distinguishably lower salary than men and Player claims that women in the UK earn as much as 140,000 pounds less than men during their lifetimes.

In Sweden we have a political party pushing the issue of gender inequality forward. My opinion of the matter is that if left alone the market and the inequalities in it will by themselves be evened. I believe that by forcing change upon the society by, for example, implementing quotas regarding gender in the work place is something that will hinder the most competent people from being chosen just because a quota has to be met. In the long run hindering the economic growth of companies and in the big picture the whole country.

References

Player, Abigail. “Gender Equality: Why women are still held back.” The Guardian http://www.theguardian.com/business/economics-blog/2013/dec/06/gender-equality-women-stereotypes-stop-progress

Kenworthy, Lane. 2007. “Is Equality Feasible?” Contexts 6(3):28-32.

Are equality and fairness feasible? A view from Denmark

English: (Green) Denmark. (Light-green) The Eu...

English: (Green) Denmark. (Light-green) The European Union (EU). (Grey) Europe. (Light-grey) The surrounding region. See also: Category:SVG locator maps of countries of Europe (Photo credit: Wikipedia)

by Lisbeth Lyngs

Lane Kenworthy poses the question “Is equality feasible?” in his text on income equality, and then continues to answer this himself in the first sentence: yes. A high rate of income equality is feasible, as he mentions is the case in Denmark, Norway, and Sweden. The Scandinavian model, where the people get many societal benefits in return for paying high taxes is, according to Kenworthy, indirectly connected to the countries’ low income inequality and “fairness” of the system. As a Dane myself I find this view interesting, and I would like to give my input on the Danish welfare model’s good and bad points and further discuss the “fairness” of this system.

Every child, regardless of where they live or what their parents’ occupation and income is, starts off on equal social ground. Free daycare institutions, public schools and education allow them equal possibility to utilize their abilities—not to worry about getting sick either, since universal health care is also free. Parents get payed child benefits from the state until the child is 18 years old, whereafter every Dane over the age of 18 is entitled to a public support for his or her further education—and should they suddenly be without work, they will receive social security benefits regardless of their position.

All this is only made possible by our taxing fee, which is one of the world’s highest. It is nearly 40% for the average wage receiver, and over 50% for the high wage receiver. In other words, the richer you are, the more you also pay in taxes.

Now, I do not think many Danes would argue that this is not “fair”—they give as much as they take from society. Still, problems arise, e.g. when immigrants gets incorporated in this system. Denmark has a lot of immigrants from Eastern Europe and the Middle East. Eastern Europeans tend to cross the border to find temporary work, while the majority of people from the Middle East come to Denmark in the hopes of finding better life conditions for themselves and stay. And as with the Danes, these people are entitled to receive the social benefits too, after having either worked or lived in Denmark for a certain amount of time.

It is then, that the “fairness” of this system suddenly gets put into question because admittedly, a lot of Danes do not like immigrants “leaching” off of their money in this particular manner. The Polish worker, who has a wife and two kids back in Poland, comes to Denmark to work and thus entitles himself to receive child benefits—which he sends straight home to his family, meaning his Danish colleagues are suddenly paying for people outside their country and society. Meanwhile the Middle Eastern families may experience tough times without work, receive money from the state, and thus further revoke the Danes’ question as to what is a fair handling of their money.

This has been an issue in Danish politics for as long as I can remember. More so since the economic crisis broke out, and Denmark’s economy dropped low and the unemployment rate went up, putting even more pressure on the welfare system’s dependency on people receiving wages and paying tax. The system may be good in creating equality and high social security for its people, but I would argue that just as it has its strength in the people, it also has its weakness. It promises to secure the people in its society, but if too many lose their jobs due to e.g. labor cuts, or their will to pay tax becomes poisoned by the “unfairness”, then where does that lead us?

Lane Kenworthy says equality is feasible, and if the Scandinavian model is proof of this, then yes. But even so, this equal society faces its hardships, relying heavily on the people to support it. Immigrants and a higher rate of unemployed people may put pressure on this system by raising questions of what is “fair” and “just”. An equal society may be feasible, but even then its questionable whether it is “just” and what then makes a society “fair”.

Reference

Kenworthy, Lane. 2007. “Is Equality Feasible?” Contexts 6(3):28-32.